Brazil's central bank announced on Wednesday that it maintained its interest rate unchanged at 14.25 percent, in line with market expectations.
The bank's monetary policy committee took a unanimous decision on the rate, its first decision made by a new board with the presence of the bank's new president Ilan Goldfajn and four new directors. This means the country's interest rate, at its highest point for a decade, has remained unchanged for a year. The rate was raised to 14.25 percent in July 2015 in an effort to curb high inflation. While the bank has an official inflation target of 4.5 percent, Brazil's worsening economic crisis saw inflation rise above 10 percent last year.
Financial markets expect Brazil's inflation to increase 6.9 percent in 2016, which is still above the 4.5-percent target. Stability measures are expected for 2017, with early predictions pointing to a 4.7-percent rise on inflation. However, with investor confidence buoyed by the pro-business Interim President of Brazil Michel Temer, markets expect the central bank to lower the interest rate to 13.25 percent before the end of the year.
Temer said in a Twitter post after the bank's rate decision that his government's main objective is to have "a monetary policy...to fight inflation." However, the interim president said the central bank had full autonomy to define interest rates.
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